Chacha Inc is a manufacturing firm and has provided following data related to costs: Details...Fixed Cost/Month ($)..Cost/unit of production ($) Wages and Salaries.. 22700.. 15 Parts and Supplies..x.. 9 Equipment Depreciation.. 1600.. 0.5 Lorry Operating Expenses.. 6300.. 1.4 Rent.. 3360 .. x Administrative Expenses.. 4300.. 0.7 Chacha computes the total costs as fixed cost/month plus variable cost. The company expected to produce 2700 units in May, but actually produced 2900 units. The products selling price is $45 per unit.

Instructions: a) Prepare static budget at the company's expected level of production (2.5 Marks)

b) Prepare a flexible budget at the company's actual level of production (2.5 Marks) c) Indicate the variances wheather favoarable or unfavorable (2 Marks)